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Rather than a fire sale, Shell may close refineries


Shell: Refinery Sales Could Be Stalled By Potential Essar IPO

By Lananh Nguyen Of DOW JONES NEWSWIRES MARCH 16, 2010, 12:33 P.M. ET

LONDON (Dow Jones)–India’s Essar Oil Ltd.’s (500134.BY) potential London listing could stall the company’s negotiations to buy three European refineries from Royal Dutch Shell PLC (RDSB), Shell’s Chief Financial Officer Simon Henry said Tuesday.

“While those negotiations [for an initial public offering] are going on, it’s very difficult for them to go forward,” with the purchase of the Heide and Harburg refineries in Germany and the Stanlow plant in the U.K., but the companies are still in talks, Henry said at a Shell strategy update in London.

Shell plans to sell 15% of its global refining capacity, or about 600,000 barrels a day of capacity, and 35% of its retail business on expectations that the downstream industry will be over supplied “for some time,” said Shell’s Chief Executive Peter Voser in a statement.

Henry said it wouldn’t carry out a “fire sale” of its plants at cheap prices. Instead, if refinery sales weren’t completed, Shell would consider the closure of plants or conversion to storage terminals.

Shell hopes to develop its business in growth markets like China. Shell is studying the prospect of building an integrated refinery and petrochemical complex with Qatar and PetroChina Co. (PTR), said downstream director Mark Williams.

-By Lananh Nguyen, Dow Jones Newswires; +44 (0)20-7842-9479; [email protected]


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